CRH plans £1.2bn rights issue to fund acquisitions

Building materials firm also announces 2008 results, with 14% drop in profit to €1,628m

International building materials firm CRH has announced it will launch a €1.32bn (£1.19bn) rights issue, partly to build an acquisitions war chest.

It also posted its final results for 2008 today, revealing a 14% drop in pre-tax profit to €1,628m (£1,462m).

CRH said that the rights issue would enable it to take advantage of an expected increase in acquisition opportunities during 2009.

Some €500m of the net proceeds of the rights issue will be also used to make early repayment of loans.

The remaining €738m will, combined with the extension of maturity of debt totalling €670m, "provide increased headroom to fund strategically important and value-enhancing acquisitions and be used for general corporate purposes".

The firm is offering 152 million new ordinary shares at €8.40 each, on the basis of two new shares for every seven existing ordinary shares held by each qualifying shareholder.

Announcing its 2008 results, the group reported that operating profit at its European divisions declined by 5% to €1.05bn (£940m).

In the Americas, operating profit decreased by 19% to €792m (£709.7m). The firm said that the weaker exchange rate between the US dollar and the euro accounted for €67m of the €188m fall.

Expenditure on acquisitions and investments during 2008 totalled €1bn.

Myles Lee, chief executive of CRH, admitted that the outlook for 2009 was “extremely challenging”.